Mercedes-Benz’s Australian operation is expecting to lift sales by up to 5000 units this year, but says the effect of the election on sentiment and the availability of credit could weigh on the result.

The local operation has made its strongest start to a year in a decade, racking up 1759 units in January, up 46 per cent on 2012 and its best start since 2003.

The market for new vehicles in Australia has been powering ahead, with 2012 sales hitting a record of 1.112 million units, up 10.3 per cent on 2011. Sales in January hit 85,430, up 11 per cent on 2012.

The local results contrast with Mercedes’ global operation, which overnight reported it was likely to experience weak sales in 2013 thanks to a Europe’s continuing economic woes and the growth slowdown in China.

Parent company Daimler’s fourth quarter 2012 net profit grew 32 per cent to €2.23 billion ($2.92 billion), thanks to a one-off €709 million gain coming from the sale of a stake in aerospace group European Aeronautic Defence and Space.

Demand for new A and B-class small cars helped lift Daimler’s fourth-quarter revenue by 3 per cent to €29.83 billion.

But the company failed to meet its own targets, chairman Dieter Zetche told a news conference. “It is a fact that we did not reach our own targets for earnings and profitability," he said.

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“We believe Mercedes will show some recovery - but closing the gap on BMW/Audi margins - and getting to a place where it can generate good cash - looks a long, long way off," the WSJ quoted Sanford C. Bernstein analyst Max Warburton as saying.

While the Australian outlook is brighter than Daimler’s global view for 2013, there are still risks, Mercedes Benz Australia spokesman David McCarthy says.

Reduced credit availability and the long federal election campaign might have a dampening effect of sales, McCarthy says. “Once an election is called it does have an impact," he says.

In Australia, Mercedes is expecting to lift unit sales by between 3000 and 5000 units in 2013, thanks to the arrival of the new A-class small car and CLA four-door coupe.

While Mercedes’ local operation is held in high regard by global headquarters in Stuttgart, local sales are still small on a global scale and are in line with Australia’s typical 1 per cent to 2 per cent share of the global market, McCarthy says,

However, sales of high-performance AMG models are disproportionately high, running at 7 per cent of the company’s local total compared to a typical 5 per cent around the world.

Problems in foreign markets mean the Australian operation can get stock more easily, McCarthy says. Normally, being a right-hand-drive market means it is “always a little more difficult to get what you need".

Within the global operation, Australia competes for stock with other right-hand drive markets like Britain, Japan, South Africa and Thailand.

The success of the new models will also hinge on the availability of stock for local dealers, McCarthy says.

Sales of the new A-class and CLA models are expected to be about 200 units a month, he says.